Independence Day Special – How We Got Freedom From Old Accounting Methods

Independence Day Special - How We Got Freedom From Old Accounting Methods Independence Day Special - How We Got Freedom From Old Accounting Methods

We all have a fair idea about how accounting has transformed over the years. It is now evolved from traditional bookkeeping or bahi-khatas to online accounting or accounting software. However, a lot has happened in between to make accounting as approachable and accessible as it is today. This Independence day, let’s try to understand the change in accounting from the Mesopotamian era to the internet era and how it has evolved over the years.

History of Accounting

The earliest evidence of accounting comes from the Mesopotamian civilizations more than 7000 years ago. They used to keep records of the goods traded or received on clay tablets. In India, around the second century B.C, philosopher and economist Chanakya wrote “Arthashastra” which described how accounting records need to be maintained. However, bookkeeping emerged during the era of barter system when there was no concept of cash and trades were carried out by exchanging goods and services.

Clay tablets from Mesopotamian civilizations
Clay tablets from Mesopotamian civilizations

Centuries later, when currency and numbers came into effect, single-entry bookkeeping system was introduced. In this system, only one column was maintained and all the financial transactions, whether paid or received were recorded in it. This became the standard practice in accounting until Luca Pacioli, an Italian monk introduced the double-entry system in the 15th century. Bookkeeping then became more effective as all the transactions were getting recorded in separate debit and credit columns, thereby providing an accurate picture of the financial position for the business.

The Pre-Pacioli Indian Double-entry System

It is believed that the Indian double-entry system known as ‘bahi-khata’ predates Luca Pacioli’s method by many centuries. It existed even before the Greek and Roman empires. It was the Indian traders who took this system to Italy, and from there it spread through Europe. The system allowed all the transactions to be first recorded in the rokad-bahi (cash book) and then transferred to the khata-bahi (ledger). It encouraged the concept of naam (debit) and jamaa (credit) for maintaining records. Bahi-khata is still used by many traditional traders in India.

The advent of technology in the world of accounting

When it comes to technology, we can go back several centuries when the first adding machine was introduced (in 1623) to ease mathematical calculations, followed by the invention of calculators in 1773. With time, the technology advanced and so did the performance of calculating tools used in accounting. However, this was not enough since accounting still required a lot of paperwork in the form of recording financial information, maintaining columns of numbers, and hand-written statements.

One of the adding machines used in the early days
One of the adding machines used in the early days

The arrival of computers and accounting software

Towards the end of the 20th century, accounting took a new turn. The arrival of computers and accounting software changed the way accounting used to be done. Programs like Microsoft excel eliminated the need for calculators and ledgers, and a whole new bunch of opportunities and challenges hit the accounting industry. Soon after this came computer-based accounting software, installing software onto every computer in an organisation was a costly affair.

The internet era and online accounting!

When the internet came to India, online accounting software also followed. Online accounting uses web browsers and smartphones to help businesses perform business accounting. It easily replaced the use of manual paper-based accounting systems or bahi-khata, spreadsheets, and traditional accounting software. Finally, cloud accounting came into the picture. This made accounting more accessible, achievable, and understandable even for people with no technical and accounting knowledge.

ChargeERP mandi accounting software

Currently, most accounting software takes into consideration business requirements. Most companies are gearing up to make the lives of even the smallest business owners a lot easier. Software like ChargeERP, is changing the face of mandi accounting responsibilities. This mandi accounting platform is exclusively designed for commission agents for recording financial information related to sellers and buyers and for tracking down their daily sales and purchases in sabzi mandis.

ChargeERP, a product of Bijak, India’s most trusted agri-trading app, is a cloud-based software that uses end-to-end encryption to store and secure sensitive data. It also allows multi-device access and promises to save 90% of your time and energy. ChargeERP even provides DEO services i.e. on-premise data entry support to their subscribers.

Recently, ChargeERP launched ChargeERP box at an event held at Le Meridien, Delhi to celebrate the first 100 users and to strengthen their bond with them. This one-of-a-kind box is designed to cater to the needs of mandi commission agents, even those who do not have proper internet connection for online accounting. This technological breakthrough is sure to bring a revolution in the mandi accounting world.

If you are looking to explore more on ChargeERP software and the box, feel free to dial +91 9311341199 or visit www.chargeerp.com. You can request a free demo here: https://www.chargeerp.com/#demo. We also suggest that you follow us on Facebook for regular updates. You can also view the latest instructional and testimonial videos on the ChargeERP YouTube channel.